Colorado has enacted minimum wage and overtime law reforms in the past few years to protect workers’ rights. State employers must know Colorado overtime laws, comply with state regulations and maintain fair labor practices.
An employer is expected to be aware of the essentials, such as minimum wage requirements in the state and the state and federal overtime laws. All non-exempt employees are entitled to overtime pay in Colorado at 1.5 times their regular wage rate. However, several other requirements, such as overtime laws, must be considered.
This article provides a comprehensive overview of Colorado overtime laws employers must be aware of in 2024.
Table of Contents
Rights, Responsibilities, and Practical Implications for Employers
Employers in Colorado have a range of rights and responsibilities under state and federal labor laws. All employers must ensure employees are paid at least the minimum wage ($14.42 per hour). While the federal minimum wage rate is $7.25 per hour, employers must follow the stricter rule. Furthermore, employers must keep accurate records of hours worked and wages paid and comply with all applicable labor laws.
Overtime wages must be paid accurately to avoid legal penalties.
Colorado allows employers to create and ask employees to work overtime schedules. Colorado has no mandatory overtime regime in its labor laws. Hence, the federal Fair Labor Standards Act (FLSA) rule allows employers to force their employees to work overtime. Federal law also gives employers the right to take disciplinary action against employees who refuse to work overtime.
Practical implications for employers include implementing robust timekeeping and payroll systems to track hours worked and calculate wages accurately. Additionally, companies should establish clear policies and procedures for handling overtime based on state and federal laws. All measures must be taken to ensure a fair and compliant workplace.
Colorado Overtime Laws are Governed by?
Colorado has a mix of state and federal laws governing overtime. There are three laws that employers must consult when creating overtime policies for their employees if they are based in Colorado.
Let’s take a look at each law.
Colorado Wage Act
The Colorado Wage Act is a crucial piece of legislation that governs wage and hour laws in the state. It requires employers to pay wages, including overtime, to employees promptly. Employees can be paid weekly, biweekly, or monthly. That act also mandates that if an employer ends a relationship with an employee, their wages must be paid no later than 24 days from the termination date.
The Colorado Wage Act regulates deductions from wages, vacation days, bonuses, and commissions. Here’s a complete overview of the Colorado Wage Act.
Fair Labor Standards Act (FLSA)
The Fair Labor Standards Act (FLSA) is a federal law that sets nationwide standards for minimum wage, overtime pay, recordkeeping, and child labor. Under FLSA regulations, employers must provide overtime pay 1.5 times the regular wage rate for working over 40 hours a week.
However, this is not an application to all employers but to:
- Employers with at least two employees and an annual revenue of at least $500,000.
- Employers who engage in interstate commerce or the production of goods for commerce.
- All hospitals, old age homes, schools, and public agencies.
In Colorado, employers must comply with state and federal regulations, following the rule that provides the most significant benefit to employees.
Minimum Pay Standards Order
Colorado’s state overtime laws are primarily governed by the Colorado Overtime and Minimum Pay Standards (COMPS) Order. The COMPS Order outlines the state’s requirements for minimum wage, overtime pay, and other labor standards. As per the law:
All non-exempt employees must be provided overtime for working more than 40 hours a week or 12 hours a day at 1.5 times their regular pay rate.
No employers can offer compensatory time off or ‘comp’ instead of overtime pay.
Employees should be given unpaid 30-minute meal breaks if their shifts are 5 hours or longer. Paid rest time off for 10 minutes must be provided after working 4 hours continuously.
Overtime Pay and Double Time Pay in Colorado
In Colorado, overtime pay is required for non-exempt employees who work more than 40 hours in a workweek or 12 hours in a workday. The overtime rate is 1.5 times the employee’s regular rate of pay. Since the minimum wage in the state is $14.42 per hour, the overtime minimum wage in Colorado is $21.63 per hour.
Double-time pay, which is twice the employee’s regular rate, is not required under Colorado law, but employers may choose to offer it as a benefit.
The employers are restricted from providing the employees paid time off rather than paying overtime. However there are some exceptions to overtime laws in Colorado for some professions like ski employees, commission sales employees, nursing home or hospital employees as well as interstate transport workers.
Industries and Positions: Who is Covered?
Colorado’s overtime laws apply to a wide range of industries and positions. Most employees are covered by the COMPS Order, including those in the private sector, public sector, and non-profit organizations. Also, all eligible employers under FLSA, as covered in the above sections, are covered and required to pay their employees overtime.
With a few exemptions, the Colorado overtime pay laws cover most full-time and part-time employees. This includes:
- Elected officials and members of their staff
- Bona fide volunteers
- Domestic employees employed by households or family members to perform duties in private residences
- Professional employees
- Students employed in a work experience study program
- Administrative employees or executive/supervisor employees
- Casual babysitters
- Property managers
- Students employed by sororities, fraternities, college clubs, or dormitories
- Loaders or mechanics of motor carriers
- Patient workers who work in institutional laundries
- Companions
- Taxi cab drivers
- Interstate drivers
- Driver helpers
- Employees working in laundries of charitable institutions that pay no wages to workers and inmates
- Outside sales employees
Healthcare, hospitality, and retail employers also have additional policies depending on their business requirements.
Overtime Eligibility
In Colorado, any non-exempt employee is eligible for overtime. In a non-exempt industry, hourly employees earning less than $1,057.69 a week are also eligible for overtime pay. However, overtime eligibility in Colorado depends on several factors, including the employee’s job duties, salary level, and work hours. Generally, executive, administrative, or professional employees are not eligible for overtime pay.
Employers must carefully evaluate employees’ roles and compensation to determine their overtime eligibility.
Overtime and Minimum Wage Exemptions in Colorado
Certain workers are covered by Colorado’s overtime and minimum wage exemptions. Typically, executive, administrative, and professional roles and certain computer professionals and outside sales employees are exempt from overtime and minimum wage laws.
Some individuals are, however, only exempt from overtime laws and not minimum wages. This includes:
- Certain workers are employed with automobile, truck, or farm implement retail dealers.
- Salespersons in trailer, aircraft, and boat retail industry
- Commission salespeople earning at least 50% of their total earnings in commissions
- Ski industry employees
Overtime Calculation for Tipped Employees in Colorado
The minimum wage for tipped employees is $11.10 per hour as of 2024, which includes a tip credit of up to $3.02 per hour.
Tip credit is a system that allows employers to pay a lower minimum wage to tipped employees, who are provided with tips and wages combined, which fulfills the minimum wage threshold.
Tipped employees must be paid at least 1.5 times the minimum wage rate minus the tip credit for overtime hours.
Suppose a tipped employee earns $8.08 per hour in direct wages and works 45 hours weekly. The calculation would be as follows:
Regular hours: 40 hours x $11.10 (minimum wage) = $444
Overtime hours: 5 hours x ($11.10 x 1.5) = $83.25
Total pay: $444 + $83.25 = $527.25
Notice that tip credit is not used in the calculations.
Overtime Calculation for Hourly Employees
Hourly employees in the state are entitled to overtime pay for hours worked beyond 40 in a workweek or 12 in a workday. The overtime rate is 1.5 times the regular hourly rate.
If an hourly employee earns $20 per hour and works 50 hours in a week:
Regular hours: 40 hours x $20 = $800
Overtime hours: 10 hours x ($20 x 1.5) = $300
Total pay: $800 + $300 = $1,100
Overtime Calculation for Part-Time Employees
Part-time employees are entitled to overtime pay if they work more than 40 hours in a workweek or 12 hours in a workday at 1.5 times their regular wage.
If a part-time employee earns $15 per hour and works 45 hours a week:
Regular hours: 40 hours x $15 = $600
Overtime hours: 5 hours x ($15 x 1.5) = $112.50
Total pay: $600 + $112.50 = $712.50
Overtime Calculation for Salaried Employees
Salaried employees earning less than minimum wage qualify for overtime pay. If they work for more than a standard 40-hour workweek, they receive 1.5 times their regular wage rate for overtime hours.
Overtime Calculation for Piece Rate in Colorado
For employees paid by piecework, the regular hourly rate is determined by dividing total earnings in the workweek by the total hours worked. The overtime rate is 0.5 times the regular rate.
Let’s consider an example-
John produces an item, earning $20 per item. In one week, he worked 55 hours and made 100 items.
Regular Hourly Pay Rate = Per sale commission × Total Sales / Total Hours Worked
Regular Hourly Pay Rate = 20 x 100 / 55 = $ 36.36
Overtime Hours:
Overtime Hours=55−40=15
Overtime Premium Rate:
Overtime Premium Rate=0.5×Regular Hourly Pay Rate
Overtime Premium Rate = 0.5 x 36.36 = $18.18
Total Compensation for the Week:
Regular Earnings = 40 x $ 36.36 = $1454.40
Overtime Pay = 15 x $18.18 = $272.70
Total Compensation:
Total Compensation= 1454.40 + 272.70 =$1727.10
Penalties for Not Providing Overtime Pay to Employees in Colorado
Colorado Department of Labor and Employment (DOLE) overlooks the complaints regarding state overtime pay. If an employer fails to provide overtime pay as required by Colorado law, they may face significant penalties of up to $1000 per employee per day for each violation.
In addition to the fine, some other penalties can also be imposed, such as:
- Back wages for all unpaid overtime hours
- Damages due to emotional distress caused by non-payment of overtime
- Attorney fee
Colorado Overtime Laws Applied to Minors
Colorado Wage Law prohibits employers from making minors work more than 8 hours a day or 40 hours a week unless there is a ‘bonafide emergency situation.’ As per the law, such a situation is “an unpredictable or unavoidable occurrence at unscheduled intervals requiring immediate action about the employment of minors in overtime situations.”
Hourly Restrictions for School-Aged Minors
In Colorado, minors who are 14 and 15 years old can work a maximum of 3 hours on school days, 8 hours on non-school days, and 18 hours per week during school sessions. During non-school periods, they can work up to 8 hours per day and 40 hours per week.
Parental consent
Parental consent may be required for minors to work during school hours and for specific jobs that may be hazardous.
Employers must keep specific records for bonafide emergencies to prove that the employment of minors for overtime hours was legal. Failure to do so can result in penalties, including fines and potential suspension of the employer’s business license.
Employee Refusal to Work Overtime in Colorado
There is no state law addressing mandatory overtime by employees. Therefore, the FLSA federal laws apply, allowing employers to force employees to work overtime when required. Disciplinary actions can be taken against employees who refuse to work overtime.
In most cases, employees cannot refuse to work overtime in Colorado. The employer may require you to work for more hours and can even fire you in case of refusal from the employee’s end. At the same time, the FLSA has no limit on the number of hours per day or week that the employer can ask you to work overtime.
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Conclusion
Employers must accurately classify employees, maintain detailed records, and establish clear policies to manage overtime effectively for compliance with Colorado overtime laws. It is crucial to avoid legal penalties and ensure employee satisfaction. We hope this guide will provide valuable insights into Colorado’s overtime regulations, from calculating overtime for different types of employees to understanding exemptions and compliance requirements.
FAQs
Q. Is mandatory overtime legal in Colorado?
Yes, mandatory overtime is legal in Colorado. However, employers must ensure that employees are paid the appropriate overtime rate and that mandatory overtime does not violate other labor standards, such as rest breaks and maximum-hour restrictions for minors. It is mandatory as long as the employees get compensated for the overtime hours worked. These include hours worked more than 12 in a day or 40 in a week.
Q. What is the overtime pay rate in Colorado?
The overtime pay rate in Colorado is 1.5 times the employee’s regular rate of pay for hours worked beyond 40 in a workweek or 12 in a workday. As the regular minimum wage in Colorado is $14.42/hour, this makes the overtime minimum wage as $21.63/hour.
Q. Are all employees entitled to overtime pay in Colorado?
No, there are exempt categories of employees who are not eligible as defined by the COMPS Order and FLSA.
Q. What are the recordkeeping requirements for overtime hours worked in Colorado?
Employers in Colorado must keep accurate records of hours worked by employees, including overtime hours for at least three years. An employer must retain records that reflect the information in the employee’s itemized pay statement for a period of 3 years after the compensation or wages were due.
Q. Can Colorado overtime pay laws be waived in a contract?
No, Colorado overtime pay laws cannot be waived in a contract, and any agreement to waive overtime pay is invalid under state law. In case of any issue, if the employee is found to be given the overtime pay, the employer has to disprove the claims that they knew or should have known that the employee was incurring the overtime without pay.
